DAC Finds Reliance Defence Financially and Technically Fit for Defence Projects : Sources


dac_finds_reliance_defence_financially_and_technically_fit_for_defence_projects_sources

Reliance Defence and Engineering Ltd (RDEL) – formerly known as Pipavav has got clearance from the Defence Ministry to participate for defence projects following a detailed financial and technical capability check of the company’s shipyard.

Sources said the clearance to Reliance Defence and Engineering Ltd, owned by Anil Dhirubhai Ambani Group, was accorded by the ministry in the last meeting of the Defence Acquisition Council (DAC) after carrying out a detailed financial and technical capability of the company’s shipyard.

The capability check was ordered in October 2015 followed corporate debt restructuring and management changes at RDEL following its takeover of the Pipavav Defence. A similar technical and capability check was also ordered for ABG Shipyard, which sources said has failed on the capacity assessment carried out by the defence ministry.

The clearance to Reliance Defence and Engineering Ltd assumes significance as it comes just a month ahead of the opening of the bids by defence ministry for the biggest warship construction project or the  Rs 20,000-crore project of making Landing Platform Dock (LPDs).

Reliance Defence and Engineering Ltd and L&T are now the two companies in the fray for this billion dollar order for the four LPDs for Indian Navy.

While two LPDs contract will be awarded to a private sector player based upon technical capabilities and financial bids, the winning firm would also assist state-owned Hindustan Shipyard Limited (HSL) to construct the remaining two.

LPD, also known as amphibious transport dock, is a warfare ship designed to transport troops into a war zone by sea, primarily using landing craft and has the capability to operate transport helicopters in addition to having hangar facilities and a landing deck.

While L&T had tied up with Spains Navantia for the contract, Pipavav had an agreement with French shipbuilder DCNS and ABG is tied up with US company Alion.

Pipavav Defence following its takeover last March has since been renamed as Reliance Defence and Engineering Ltd (RDEL).

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